Outsourcing and Partnering for
an improved Distribution Model
Rob Botha
Amref Health Africa International Conferecne
24th November 2014
Agenda
The Challenge
The Solution
•
Direct Delivery
•
Support Structures
•
Outsourcing
•
Partnerships
•
Performance management
Results
Next steps
Conclusion
The Challenge
10 central medical stores or depots
• Insufficient scale in warehousing and
distribution
• Multiple tiers
• Lack of visibility and information
• Financial
• Administrative inefficiencies
Supplier
Distributor
Depot
Sub-Depot
Hospital
Clinic
3
The Solution
Direct Delivery model
Bypassing the depot model
• Leveraging existing private sector
• Infrastructure
• Capacity
• Resources
Supplier
Distributor
Depot
Supplier
Distributor
Hospital
Sub-Depot
Hospital
4
Direct Delivery
Matching Responsibility with Capacity
600
500
Volume
400
Capacity
300
25%
35%
200
100
0
2010
2011
2012
7
2013
Top suppliers
2014
X
2015
27
2016
Major hospitals
2017
=
2108
2019
2020
70%
Of volumes going through the
Depot (that can be streamlined)
5
Support Structures
6
Outsourcing
Indirect outsourcing to suppliers
Leveraging private sector supply chain
• Shifted the risk to suppliers
• Focus on core competences
Selection
Distribution
Storage
Quantification/
Forecasting
Procurement
Medicine Management Cycle,
7
www.who.int
Partnerships
• SIAPS and SCMS partnered to customise existing RXSolution software
• SIAPS IT development and technical support
• SCMS process definition and user specifications
• Iterative approach as requirements evolved
• Providing visibility and information
• Partnerships and collaboration is critical to a co-ordinated approach to
systems strengthening and results in a superior outcome
8
Performance Management
• Visibility into performance of all stakeholders
• Facilities
• Provincial departments of health
• Suppliers
• PMPU
• Finance
• Improved supplier performance and contract management
• Performance monitoring
• Improved supply
• Demand planning and forecasting
• Evidence based decision making
• Sales and Operations Planning (S&OP) meetings with suppliers
9
Results
Successes
• Supplier on-time delivery – improved from 14% to 85%
• Orders cancelled due to supplier stock-outs – improved from 19% to >1%
• Order fulfilment – improved from 77% to 97%
Challenges
• Documentation from facilities
• Manual re-entry of data
• Connectivity and IT infrastructure
10
Next Steps
• Increase coverage to new provinces
• Software developments to increase electronic interfaces
• Improved document management and flow
• Cross Docking for other levels of care
• Nominated Delivery Days (NDD)
Supplier
Distributor
CrossDock
Clinic
11
Conclusion
The success of the Direct Delivery model required:
• Outsourcing
• Private Sector Engagement
• Partnerships
Results
• Improved supply of medicine to facilities
• Improved performance management and contract management through
visibility
12
THANK YOU